Southeast Asia’s US$1T digital dream slips five years, and AI is the new reason to keep believing

Southeast Asia's ambitious goal of becoming a US$1 trillion digital economy by 2035 has slipped to 2030 due to the slower-than-expected growth of the region's digital economy. The 2026 projection of US$368 billion gross merchandise value (GMV) for digital commerce is up 17% year-on-year, with the report covering ten countries, including Brunei, Cambodia, Laos, and Myanmar.

The report, titled Building the Intelligent Economy, focuses on the rapid adoption of generative AI, with 243 million people (58% of the working population) using AI in the past three years, four times faster than mobile internet adoption. While 70% of Singaporeans (3.2 million) have adopted AI, per capita usage is only 10% of US levels, and most users rely on free tiers.

The report introduces tokens as a new metric to measure AI usage, projecting usage to grow 60-fold by 2030. AI-driven credit assessment is helping providers reach first-time and unbanked borrowers, but this growth in digital financial services warrants scrutiny over repayment and collections. AI agents are gaining trust, with 93% of users trusting AI in purchasing journeys, but 44% demand robust privacy protections and 30% want the ability to undo agent actions.

Southeast Asia's funding for digital applications sectors has stabilized at around US$8 billion annually, with 80% of deal value going to AI products. Private funding remains concentrated in Singapore, which is adding 200MW of green energy to its AI infrastructure. However, the pie is flat, and AI now accounts for 26% of online trip-planning journeys, edging past social media.